President Trump recently announced a change in his life that many people of a certain age and certain level of wealth make: he said he has moved his permanent residence to Florida.
While he tweeted that his lifelong home state of New York “will always have a special place” in his heart, his new state has something special too: no state income tax and no state inheritance and estate taxes.
A financial information website speculated that his family might cheer loudest over the move, considering how much money he could save in income taxes. Of course, his estate will regardless be subject to the federal estate tax, which taxes estates worth at least $11.18 million (as of 2018) at a rate of up to 40 percent.
As most of our Brevard County readers know, Florida is one of just seven states that have no income tax, which is precisely why so many wealthy people come to the Sunshine State to retire (another reason is that sunshine itself, of course).
It should be noted that Florida residents who inherit out-of-state property might have to pay inheritance taxes there.
That might well make a person wonder what the difference is between an inheritance tax and an estate tax. An inheritance tax is levied against the heirs, while estate taxes are paid by the personal representative or estate executor, typically using the estate’s assets.
A recent study determined that the president’s move is pretty common among those with a very high net worth – especially as they get older. They tend to migrate to states such as Florida that no have estate taxes.
There are, of course, other steps that Florida residents can, with the help of an experienced estate planning attorney, take to protect their assets and heirs.